Weekly Fundamentals - US Tax Bill and Prolonged EZ Crisis will Push Gold Higher in the Long-term

Commodity markets continued to be affected by macroeconomic developments rather than demand/supply fundamentals. Selloff in bond markets resulted in rise in yields and in turn triggered liquidations in commodities with gold in particular. Earlier in the week, market sentiment was buoyed as China did not announce a rate hike even though inflation exceeded 5% in November. The risk-on environment continued as the FOMC meeting was a quiet one. Extensions of tax cuts and benign US data, except for employment reports, boosted confidence on the country's recovery, triggering upgrades in consensus forecasts and speculations that the Fed will not need to extend monetary easing after QE2. Bullishness diminished later in the week as debt problems in the European periphery showed signs of contagions.

Read more here:
Weekly Fundamentals - US Tax Bill and Prolonged EZ Crisis will Push Gold Higher in the Long-term